Suppose today is December 4, 2020, and your firm produces breakfast cereal and needs 135,000 bushels of corn in March 2021 for an upcoming promotion. You would like to lock in your costs today because you are concerned that corn prices might go up between now and March. Use Table 25.2 a. What is the total price you are locking in for the 135,000 bushels of corn based on the day's closing price? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) b. Suppose corn prices are $4.71 per bushel in March. What is the profit or loss on your futures position? (Enter your answer as a positive value. Do not round intermediate calculations and round your answer to the nearest whole number, e .g., 32.)
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- A chain of take-away pizza stores is considering introducing a new line of gluten-free pizzas. Net revenue from the new line of pizzas is expected to total $500,000 per year, but 15% of this net revenue is forecast to consist of people switching from the regular pizzas to the gluten-free pizzas. How would you describe this situation in terms of the NPV analysis upon which the situation will be based. Question 1Answer a. There is a negative externality equal to $425,000 which should be included in the NPV analysis for the gluten-free pizza project. b. There is a positive externality equal to $425,000 which should be included in the NPV analysis for the gluten-free pizza project. c. There is a positive externality equal to $75,000 which should be included in the NPV analysis for the gluten-free pizza project. d. There is a negative externality equal to $75,000 which should be included in the NPV analysis for the gluten-free pizza project.You are the buyer for a cereal company and you must buy 80,000 bushels of corn next month. The futures contracts on corn are based on 5,000 bushels and are currently quoted at 415′0 cents per bushel for delivery next month. If you want to hedge your cost, you should _____ contracts at a cost of _____ per contract.Consumer prices rose 1.0% in May 2022 and 1.3% in June 2022. One of your relatives made the claim that consumer prices rose more than 2.3% over the two-month period covered by May and June. Is this person correct or not? If your relative is correct, justify this claim with calculations, explaining why you're making the calculations you are and showing how much prices actually rose over the two month period as a percentage. If your relative is incorrect, explain their error, using calculations and explanation to back up your claim.
- Last year, a mother In a small African nation could buy a pound of flour for the U.S equivalent of $1.30. Six months ago, an identical pound of flour costs $3.40. Today she would need $5.60 to buy that pound of flour. This example of the general upward movement of prices is called: a. Deflation b. Inflation c. Supply-side pricing d. Discretionary pricing e. Profit maximization pricingThe Home Depot is clearing out lawn mowers for $399.75 in an end-of-season sale that ends on September 30. Alternatively, you could wait until April 1 (assume February is in a non–leap year) and pay $419.95 on the same lawn mower. Assume your money can earn simple interest of 4.72% on a short-term investment.a. Which option should you choose?b. How much money will you have saved on September 30 by making that choice?Hyperion, Inc. currently sells its latest high-speed color printer, the Hyper 500, for $350. It plans to lower the price to $300 next year. Its cost of goods sold for the Hyper 500 is $200 per unit, and thi year's sales are expected to be 20,000 units.a) Suppose that if Hyperion drops the price to $300 immediatley, it can increase this year's sales by 25% to 25,000 units. What would be the incremental impact on this eyar's EBIT of such a price drop?b) Suppose that for each printer sold, Hyperion expects additional sales of $75 per year on ink cartridges for the next years, and Hyperion has a gross profit margin of 70% on ink cartridges. What is the incremntal impact on EBIT for the next three years of a priced drop this year?
- The New York Times sells a weekly magazine which advertises local second-hand goods. The owner can buy the magazine for 15 cents each and sell them at the retail price of 25 cents. At the end of each week unsold magazines are obsolete and have no value.The owner estimates a probability distribution for weekly demand which looks like this:Weekly demand in units Probability10 0.2015 0.5520 0.25 1.00(i) What is the EV of demand? (ii) If the owner is to order a fixed quantity of magazines per week how many should that be? Assume no seasonal variations in demand.In December 2020, a pound of lemons cost $1.896, while a pound of bananas cost $0.572. Three years earlier, the price of lemons was $1.989 a pound and that of bananas was $0.558. a. What was the annual compound rate of growth in the price of lemons? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 4 decimal places. Negative answers should be indicated with a minus sign. b. What was the annual compound rate of growth in the price of bananas? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 4 decimal places. c. If the same rates of growth persist in the future, what will be the price of lemons in 2030? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. d. What about the price of bananas? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. a. Compound annual growth rate of lemons b. Compound annual growth rate of bananas c. Price of lemons d.…Red-Star Co. wants to sell an electrical generator for AED 165,000 in 2024. The price of this generator in the market today is AED 94,000 (according to GE company who is the producer of this generator). If the discount rate on this generator is 9.5 percent per year. Do you think the firm will make a profit if they sell this generator? What is the rate that will make the firm breakeven? Note: Profit = Revenue -cost
- A farmer wants to sell future harvest of wheat at the current rate of Rs.18, but he fears that the wheat prices might fall in the next 3 months. In this case, he enters a contract with a grocery store for selling them 1000kgs of wheat at Rs.18 in 3 months. Draw the pay-off chart for the farmer.At a supermarket, the price of yellow onions dropped from $0.56 per pound to S0.44 per pound. (2) What is the percent decrease in the price of onions? (Round your answer to one decimal place.) コx (b) Tomatoes are expected to undergo the same percent decrease in price. If they currently sell for $1.03 per pound, what will be the new price (in $ per Ib) of tomatoes? (Round your answer to two decimal places.) ******** X per lb Enter a nurmber.2. Company XYZ sells CDs. The price of its new CD is $15. Fixed costs are $1,500,000 per year. Variable costs are $9. The company expects to sell 300,000 units this year. a. How many DVDS will the company need to sell to break even? b. If the forecasts are correct, how much will company XYZ make or lose this year (before taxes)?